ASEAN (in particular Malaysia) were key part of US Trade diversification from China Trade. Malaysia, Thailand, Cambodia and Australia had key deals for the US to get 30-50% of the rare earth supply over the next 2-3 years up from 10% non-China now. Myanmar and Vietnam also have large rare earth supplies and they are part of ASEAN.
On October 26, 2025, during the ASEAN Summit in Kuala Lumpur, the U.S. and Malaysia signed a Memorandum of Understanding (MOU) on Cooperation to Diversify Global Critical Minerals Supply Chains, alongside a broader Reciprocal Trade Agreement. Malaysia agreed not to impose bans, quotas, or restrictions on exporting critical minerals (including rare earth elements) to the U.S. It also committed to ensuring no limits on sales of rare earth magnets to American companies.
The U.S. will apply a 19% reciprocal tariff on most Malaysian imports (down from higher threatened rates), excluding certain products like electronics. In exchange, Malaysia opens markets for U.S. energy exports and commits to $150 billion in bilateral trade deals over time, focusing on energy, tech, and minerals.
This is part of President Trump’s Southeast Asia tour to counter China’s supply chain influence. The deal builds on Malaysia’s growing rare earth sector (Lynas Rare Earths’ operations) and aims to integrate U.S. firms into Malaysian mining and processing.
Pre-October 2025, China held strong leverage via rare earth export controls and U.S. agricultural dependence. The U.S. countered by fast-tracking diversification, entering U.S.-China talks from strength.
U.S. gains breathing room for domestic production and ally integration, diluting China’s nuclear option. Trade volume dropped from $758B (2018) to $578B (2025), with ASEAN absorbing ~20% of redirected flows.
Trump announced the 100% tariff threat on October 24, 2025, but the SE Asia/Australia deals (Oct 20-26) were timed to coincide, signaling alternatives.
Beijing agreed to a trade framework on October 26. A one-year pause on U.S. tariffs (averting Nov 1 deadline), halt to rare earth export curbs and $20B in U.S. soybean/energy purchases. No full Phase 2 deal—it’s a truce to buy time for Trump-Xi summit.
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
Known for identifying cutting edge technologies, he is currently a Co-Founder of a startup and fundraiser for high potential early-stage companies. He is the Head of Research for Allocations for deep technology investments and an Angel Investor at Space Angels.
A frequent speaker at corporations, he has been a TEDx speaker, a Singularity University speaker and guest at numerous interviews for radio and podcasts. He is open to public speaking and advising engagements.
